ECB’s Chief Economist Philip Lane, in an interview with Spanish newspaper El Confidencial, expressed growing confidence regarding return of inflation to 2% target, thereby increasing the likelihood of an interest rate cut in June.
Lane cited recent data, and stated, “Both the April flash estimate for euro area inflation and the Q1 GDP number that came out improve my confidence that inflation should return to target in a timely manner.” Though, he emphasized the need for ongoing monitoring, acknowledging the influx of additional data between the interview date and June.
Lane downplayed the spillover effects of decisions made by Fed, stating, “The combined effects of decisions taken by the Federal Reserve would be ‘largely contained.'”
Furthermore, Lane underscored the importance of geopolitical developments, particularly in the Middle East. “We have to accept that we live in a world that is going to face a lot of geopolitical tensions over a number of years,” he said, recognizing the long-term reality of enduring geopolitical tensions.
